Poverty of Protection from Cyber Crime in the Financial Sector

A third-quarter “Systemic Risk Barometer” report by New York-based Depository Trust and Clearing Corporation, which provides settlement services to financial markets, found that 33% of 202 financial institutions surveyed rate cyber attacks as the number one systemic risk to the broader economy as opposed to 24% in the first quarter of this year.

DTCC recommends that financial firms define what constitutes critical infrastructure within their organization, research cyber security systems, and change the way cyber security is approached from “check the box” security to “ actively hunting for threats.”

The survey says that 76% of participants have increased staff and budgets for detection and mitigation of systemic risks in the past year. It also suggests that in the probable event of a network intrusion, financial institutions should “plan ahead to identify ways to deal with a unique blow to your network and systems.”

Commercial general liability insurance policies do not usually cover the loss or damage to “electronic media and records”. Insurers, businesses and banks will continue to wrestle with who is responsible for exorbitant costs of major security breaches. A comprehensive systemic defense is required in order to avoid litigation and mitigation costs that can run in the billions.

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